Floyd Mayweather Hits Jackpot With New Showtime PPV Deal

Kurt Badenhausen
,
Forbes Staff
I cover sports business with rare dips into b-schools, local economies

Floyd Mayweather will be back in the ring in May with a new PPV deal that will keep "Money" among the world's highest-paid athletes. (Image credit: Getty Images via @daylife)

Floyd Mayweather announced Tuesday that he is climbing back into the ring May 4 to face off against Robert “The Ghost” Guerrero. The fight was expected, but the real surprise came with the news that Mayweather would leave long-time partner HBO for a pay-per-view deal with Showtime Networks. The six-fight, 30-month deal was called the "richest individual athlete deal in all of sports" in a press release.

This marks a huge loss for HBO. Mayweather's nine HBO PPV events generated 9.6 million buys and $543 million in television revenue, according to the network. Mayweather has been part of the four biggest non-heavyweight PPV events in boxing history. With the recent struggles of Manny Pacquiao in the ring, Mayweather is the undisputed king of PPV.

Mayweather was the world's highest-paid athlete in our June 2012 list with earnings of $85 million, based on his fights with Victor Ortiz ($40 million) and Miguel Cotto ($45 million). Mayweather is able to command a bigger piece of fight revenues by acting as his own fight promoter through his company Mayweather Promotions. He collects all of the revenue from tickets, pay-per-view and sponsorships and covers the costs, including the purse for his opponent.

Mayweather does not do any personal endorsement deals, but instead signs up sponsors for his fights that will help boost the PPV audience. The Showtime deal, no doubt, will include more promotional opportunities for Mayweather and his fights. The Guerrero fight is expected to get heavy promotion on Showtime's parent, CBS.

So how big is the deal? Financial details are "contractually confidential," but a look at Mayweather's recent fight earnings gives an indication of how lucrative this agreement could be. Mayweather did not leave HBO to go to Showtime for less money. There is a reason they call him "Money."

Mayweather averaged $40 million in earnings his past three fights with the Cotto fight the high-water mark. He earned the biggest guaranteed purse in boxing history ($32 million) for the Cotto bout with Mayweather's share of PPV revenues pushing the total to $45 million. Cotto is arguably the sport's third biggest PPV draw after Mayweather and Pacquiao, but Mayweather's last three fights averaged 1.4 million PPV buys (the Cotto fight was 1.5 million). There are compelling fights to be made after Guerrero. A bout between Mayweather and Mexican fighter Canelo Alvarez would generate huge interest and PPV revenue.

Mayweather is likely looking at a guarantee of around $200 million for the six-fight deal. Pay-per-view revenues will push that total past $250 million. How much past $250 million depends on the quality and marketability of his opponents, as well as Mayweather staying undefeated.

There are no guarantees that Mayweather will fight all six times. If he does it will be huge shift from his recent activity, as he's fought only four times in the past five years. He also turns 36 on Sunday. The biggest athlete contract on the books right now is the New York Yankees' $275 million deal with Alex Rodriguez which spans 10 years. Mayweather has a chance to top that if, and it is a big if, he fights six times over the next two-and-a-half-years.